Seed CX, a leading institutional digital asset exchange for spot trading, has launched a new digital asset wallet solution featuring on-chain settlement in response to growing interest and participation of institutional investors.
As the cryptocurrency market matures, investors look for the same degree of operational confidence that they have with more traditional financial and commodity markets. Seed CX has decided to address the demand with the launch of its own wallet solution.
Via its settlement subsidiary, Zero Hash, each Seed CX market participant receives a unique wallet instead of having their assets carried within a single omnibus wallet, or across multiple shared wallets, which is the common approach taken by other exchanges, according to the company.
The crypto wallet allows Zero Hash to synchronize its internal accounting layer with the blockchain, with deliveries and settlements being posted to the public network for immutable record-keeping, which ensures the ability to independently confirm all Zero Hash-initiated transactions as well as all deposits, movements, and withdrawals.
By spreading digital asset holdings across multiple wallets, Seed CX reduces the risk of hacking. Traders have lost $880 million in the last two years due to hacks and scams, according to recent estimates. The exchange has invested in sophisticated operational safeguards to keep crypto wallets secure.
Edward Woodford, co-founder and CEO of Seed CX, commented:
“Seed CX is purpose-built to provide the security and stability institutional investors demand, and the cost-efficiency and performance that large liquidity providers require. On-chain settlement helps Seed CX provide trading firms with an experience that is both cost-effective and high performance, while also providing the operational and financial security investors demand […] In any market, there is a risk of bad actors, and our focus is first to make it as difficult for hackers as possible, and second, to limit the potential gain for their efforts,” added Woodford. “Our hope is to make the risk-reward calculation for an attack to be as unappealing as possible.”
Julie Myers-Wood, a public director of Zero Hash, said:
“Zero Hash has learned a great deal from the shortcomings and failures of other exchanges. Giving participants full visibility into their own unique wallets is a big part of that, but it’s not enough. Zero Hash has a wide range of operational controls designed to provide investors with a first-of-its-kind experience.”
Zero Hash provides a secure environment by creating new wallet addresses for each participant every day as well as each time movements between wallets take place. Additionally, segregated wallets and clear ownership of assets are two other features that reduce risk of hacking. The calculation and settlement agent for digital assets also uses restricted access to withdrawal assets, whitelisted addresses, and multi-sig security as methods to safeguard client funds.
In September 2018, the first licensed virtual asset exchange to offer institutional trading and settlement for both spot market and CFTC-regulated derivatives raised $15 million in a Series B funding led by the only investor Bain Capital Ventures.